$4.$ Answer the following three questions:

a$.$ Why might some firms in an industry be vertically integrated into the same activity while other firms in the industry are not integrated into this activity?

b$.$ Looking at one industry, why might some activities in the value chain be outsourced more frequently than other activities, systematically across all firms?

c$.$ Explain the mechanism through which a firm resolves control issues by vertically integrating an activity. Can the firm resolve these issues completely? If not, why not?